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Obama Points to Farm Subsidies for Budget Cuts

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November 25, 2008 4:39 PM

ABC News' Z. Byron Wolf and Nitya Venkataraman Report: Asked today where he would start cutting spending once he becomes President, Barack Obama immediately pointed to abuse of farm subsidies.

If changing government is his goal, he'll have no more difficult time than with farm subsidies, which confound academics and politicians in both parties, but represent a lifeblood of revenue for the middle of the country.

"Let me give you one example of what I'm talking about," Obama said of government waste at a press conference in Chicago today. "There's a report today that from 2003 to 2006, millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies. If this is true, it is a prime example of the kind of waste I intend to end as president." (Read the report here.)

While Obama was talking about people gaming the subsidy system, it is interesting that he immediately thought of farm subsidies - sold every five years when the Farm Bill is passed as a way to help family farmers stay in business and keep American agriculture competitive in the global economy - goals that many people think farm subsidies miss by a wide margin as John Stossel found in Nebraska in October.

Fred Kirschenmann who owns a 3500-acre mixed grain and livestock farm in North Dakota says "in the short term, subsidies are necessary when you have volatility in prices" but ultimately are "not a sustainable system" for small family farms.

Farmers, he says, have never been in a position to bring a product in and determine its value against the market. "They have no economic power to negotiate a price that compensates them for their cost of production."

"What we need to be doing is gradually transitioning away from subsidies to a system that allows farmers to recoup their cost of production,' he says. "Subsidies should not be a handout they ought to be designed so that they provide a basic support to a system so a farmer doesn't go out of business."

Obama grudgingly supported the farm bill last Spring, and supported overriding President Bush's veto of it. He argued at the time that while the bill was not perfect, it was good.

That was not the tack President Bush took when he vetoed the bill in large part for not working enough to cut farm subsidies. In the official administration policy against the Farm Bill, the White House said "the bill continues to increase price supports and send farm subsidies to people who are among the wealthiest 2 percent of American tax filers whose three-year average Adjusted Gross Income (AGI) is greater than $200,000. Payments should be targeted to those who really need them, especially those who have a meaningful connection to production agriculture. This action does not represent fiscal stewardship nor is it farm program reform."

Ending farm subsidies altogether is a favorite topic of Obama's favorite Republican, Indiana Republican Richard Lugar.

Lugar and Sen. Frank Lautenberg, D-NJ, in late 2007 offered an amendment to the most recent farm bill that would have ended direct subsidy payments to farmers altogether and instead created a safety net - think large-scale, no cost insurance for emergencies.

Their proposal got 37 votes in 2007. Obama was campaigning, but his Illinois colleague Dick Durbin supported the amendment.

On his change.gov transition website, President-elect Obama promises to "Fight for farm programs that provide family farmers with stability and predictability. Implement a $250,000 payment limitation so we help family farmers -- not large corporate agribusiness. Close the loopholes that allow mega farms to get around payment limits."

Cutting subsidy payments at $250,000 was the same level sought by President Bush (and overridden by Congress with Obama's help).

November 25, 2008 in Bush, George W., Obama, Barack, Vote 2008: Democrats, Vote 2008: Republicans, Washington, White House | Permalink | User Comments (28)

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Time for change!
Farm Aid you better get ready to gain even more money. They will need your help even more.
Farmers are not as important as the banks, but they are pretty important.
Watch food prices go up even more!!!!!!

Posted by: tonya | Nov 25, 2008 5:15:21 PM

Just love the Lib media. Last paragraph, Bush tried this before but Dems voted against it

Posted by: muxy | Nov 25, 2008 5:20:17 PM

I was under the impression that a lot of farmers buy crop insurance to at least recoup their costs and make a reasonable profit. One farmer I heard accused of farming by insurance.

Aren't farm subsidies the same as socialism? Aren't most farmers Republicans?

There are plenty of loopholes in a lot of government systems. There are people who know how to work the systems. I have seen someone pay for groceries with food stamps and go out and drive away in a new BMW! I want to see a Secretary of Loophole closing.

Posted by: Shockolit | Nov 25, 2008 5:36:45 PM

Although I am far from an expert in farming subsidies, if memories serves, farm subsidies are used to regulate the price of crops as well as the production...it really does not matter if it is a family run farm or a corporate farm as they all supply our nation's pantries. If you take away farming subsidies for the majority of farms, as most are corporate farms, would not our prices increase as well?

Posted by: socalindep | Nov 25, 2008 6:20:10 PM

Farm subsidies vary from paying a farmer not to plant his corn cropp because the market is already flooded with corn. Most family own and run farms are hurting in Texas. Two years ago drought, last year floods and this year drought.
This is what I hope Obama is talking about....................
A founder and former executive of an insurance company who earned more than $300,000;

* An individual with ownership interest in a professional sports franchise, who received more than $200,000;

* A top executive of a major financial services firm; and

* 9 individuals who reside outside of the United States -- in Hong Kong, Saudi Arabia, and the United Kingdom, for example.
GAO recommends that USDA work with IRS to develop a system for verifying the income eligibility for all recipients of farm program payments. If USDA determines that it needs authority to work with IRS, it should seek this authority from Congress, as appropriate. Good luck in getting OUR Congress to pass approval.... Isn't our Gov't run so Efficiently.....lol

Posted by: 55Mariposa | Nov 25, 2008 6:50:35 PM

Maybe that will end the ethanol nonsense so that we are more dependent on foreign oil?

Posted by: beebop | Nov 25, 2008 7:06:31 PM

Sam Donaldson the former television anchor and now political commentator receives subsidies for his 'gentlemans farm' that nets in the millions.

Posted by: Truth Matters | Nov 25, 2008 7:34:28 PM

It's entertaining to watch Obama discussing doing these things. He really truly is among the most inexperienced Presidents we have ever elected.

When he goes against the inside-the-beltway crowd in Washington DC they are going to do to him what they did to the last Democratic President with majorities in both houses.

The day that Jimmy Carter started talking about a zero-based budget for the bureaucracy was the day the knives started coming out, and his fellow dems were the ones who wielded them.

The same future awaits Obama.

Posted by: George Hanshaw | Nov 25, 2008 8:43:16 PM

If he would veto every bill that was on spending, he would be a very unpopular president, but the budget would be balance.

He needs to take a page out of macains play book.

Posted by: James | Nov 25, 2008 11:19:40 PM

I would like to know how much the farms in Oregon are receiving in subsidies in addition to what they are being paid to put wind mills on their land?

Posted by: susan | Nov 26, 2008 3:50:48 AM

I don't get any subsidies and neither does my employer. None of my friends does either. Most farmers don't get subsidies either. It is unjust for a few to get free money from the rest of us just because they have political pull. Subsidies are just stealing and are part of why we as a country are going down the tubes economically. They should be stopped immediately. The few farmers that get these subsidies should earn their pay just like everyone else.

Posted by: MarkV | Nov 26, 2008 4:12:16 AM

What is this? The "lord god Obama" is again switching his position on something.. and this time to follow a Bush policy? How could somebody with the infinite knowledge of Obama have been wrong, and Bush right? Liberal heads must be exploding all over the place...

Posted by: howwouldiknow | Nov 26, 2008 8:30:56 AM

So....all you good libbies.....

Which Obama is he ????

"On his change.gov transition website, President-elect Obama promises to "Fight for farm programs that provide family farmers with stability and predictability. Implement a $250,000 payment limitation so we help family farmers -- not large corporate agribusiness. Close the loopholes that allow mega farms to get around payment limits."

Cutting subsidy payments at $250,000 was the same level sought by President Bush (and overridden by Congress with Obama's help)."

Let us see how you spin this one!!!!!

Obama & the Farm bill :

I'm for it
I'm Against it
I'm for it
I'm Against it
I'm for it
I'm Against it
I'm for it
I'm Against it
I'm for it
I'm Against it
I'm for it
I'm Against it
.
.
.
Ok...I'm for it...Lets VOTE !!!!
.
.
.
Im campaigning...I'm against it!!!!
.
.
.
I won...I'm Against it...I Think ?

Posted by: Mike_C | Nov 26, 2008 8:50:23 AM

Cutting farm subsidies and agricultural free market reform?

Wow, that sounds like Newt Gingrich's Contract with America.

Posted by: Change isn't what it used to be | Nov 26, 2008 8:51:01 AM

Phase out corporate welfare for massive agribusiness conglomorates. What's the controversy? Sounds good to me.

Posted by: Yukon Sam | Nov 26, 2008 10:04:49 AM

Hey Yukon,

The "controversy" is that Obama supported it!!!!

A bill that even Bush said gave breaks to "the richest 2%"...and Obama Supported it!!!

Then he runs claiming he wants the top 5% to pay more!!!

FLIP-FLIP
FLIP-FLOP

Yeah,...leadership...and CHANGE....and the check is in the mail!!!!

Posted by: Mike_C | Nov 26, 2008 10:18:19 AM

After eight years of stiff-necked "stay the course" policies have plunged us into one avoidable disaster after another, you're still sticking with that old "flip-flop" song and dance?

How very old-school.

Posted by: Yukon Sam | Nov 26, 2008 1:18:37 PM

How typical of a liberal!

You accuse, but refuse!

Talk about about being blinded by the light! You folks better get used to the idea of being disapponted, cause right now, it looks more and more Like its Bush policies for 4 more years!!!!!>...LOL

Posted by: Mike_C | Nov 26, 2008 1:31:31 PM

LOL....STAY THE COURSE....LOL

Hey....you are capable of reading right???

He fought aginst Bush on this issue while wa sin the Senate...Now he is about to take Bush's office, AND HE AGREES WITH BUSH NOW!

Perhaps you have a better definiton of FLIP-FLOP????

Old School works quite well actually!!

Posted by: Mike_C | Nov 26, 2008 1:34:44 PM

Hey I will say this,

FINALLY OBAMA GAVE US CHANGE (IN HIS POSITION) THAT CAN BELIEVE IN !!!!!

Posted by: Mike_C | Nov 26, 2008 1:36:09 PM

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